Hacker News Reader

Comment by krschultz | Hacker News Reader

The loss of up to 200 jobs at Space Exploration Technologies Corp. is due to firing of “low performer” employees as part of its annual review process, and not layoffs, the company’s president said July 26. [1]

That sounds like trying to dodge officially having a layoff, or pretty shitty company culture. I wonder what other SpaceX employees think of the matter. I didn't see much news about it.

[1] http://www.spacenews.com/article/launch-report/41428spacex-s...

View on HN

Allegedly, Cisco had this as official policy. They believed that by firing their lowest 10% after performance reviews every year, they would become a lean and mean beast. In practice, this sort of policy leads to the worst incentives for a business. Managers fight to protect friends at performance evaluation time who don't deserve it over those who are actually star workers, but less popular.

In practice, you lose people who are keeping the lights on and who hold vast organizational knowledge. Meanwhile, your entire company becomes physically-attractive subordinates.

The lowest ten percent thing was also a GE, Jack Welch thing. Interestingly, I'm pretty darn sure they always positioned a mass firing as a layoff, even though they applied the ten percent policy.

I talked to some SpaceX people a few months ago and it sounded like the place is a real meat grinder. They are all super pumped about working at SpaceX, just incredibly passionate people who really think they will be on Mars in a few years - At the same time they all work 14 hour days and according to them the retention rate is about a year an a half. My guess is that some people trying to skate by with 10 hour days and management decided they can can them and get more young blood to feed the machine

Same dynamic as the games industry then.

Is there something inherently wrong with firing "low performers" rather than laying them off?

Question is whether they are actually "low performers", or just culled as most of the staff became unnecessary and legalisms lead to one choice of euphemism over another.

Well, generally speaking "firing" reduces the amount of unemployment insurance you get, while a layoff gets you the full amount. So an employer that shrouds a layoff in a firing is screwing the employee twice.

I generally think that the employer should have a very high bar on proving that it was performance based when you are laying off significant % of the workforce at one time. Every time I was involved in an employee firing, it happened out of phase with the typical performance review cycle, and it was typically one person at a time.

> "firing" reduces the amount of unemployment insurance you get

Could you describe how this works? Do you get unemployment for a longer period of time or larger payments if you were laid off?

severance pay is given out for layoffs and not firings. It always seemed like a weird system to me b/c if you're laying people off, you're probably already strapped for cash - so you'd try to find an excuse to fire the person.

Yes and no... if your fiscal management is that shoddy that severance is a problem, you're beyond screwed as a company. The idea is that "Well, we're running down our funds, best to get these people out the door now with x month's salary, rather than hope something turns around in x+y months."

Reply on news.ycombinator.com